2012 (2) TMI 625 - HC - Central Excise

Summary

Issues Involved:
The judgment addresses the issue of whether the CESTAT was justified in deleting the penalty levied under Section 11AC of the Central Excise Act, 1944 due to the absence of suppression of facts with intent to evade duty.

Details of the Judgment:

1. The respondent/assessee was involved in manufacturing excisable goods and had agreements with exporters to transfer advance licenses for importing raw materials. The value of these transferred advance licenses was not initially included in the value of goods sold for export.

2. Initially, the Revenue argued that the value of advance licenses should be treated as additional consideration. However, a previous decision by the CESTAT in the case of IFGL Refractories Limited held otherwise.

3. Subsequently, the Apex Court ruled that the additional consideration from advance licenses must be included in the value of goods sold. Following this decision, the excise authorities initiated proceedings for duty recovery and imposed penalties under Section 11AC for a larger period of limitation.

4. The CESTAT, in an order dated 23rd September, 2010, set aside the duty demands and penalties imposed by the excise authorities for the period from December 2000 to September 2005, citing no suppression of facts by the assessee.

5. The judgment highlighted that the decision in favor of the assessee by the CESTAT and the known fact that the assessee sold goods to acquire advance licenses were factors acknowledged by the Revenue from the beginning. The duty demand was based on the Apex Court's ruling and not due to any suppression by the assessee.

6. Considering these circumstances, the CESTAT's decision that there was no suppression of facts and no justification for invoking the extended period of limitation was upheld. The appeal was dismissed with no order as to costs.